Head-To-Head Review: TE Connectivity (TEL) and EACO (EACO)

TE Connectivity (NYSE: TEL) and EACO (OTCMKTS:EACO) are both computer and technology companies, but which is the better investment? We will compare the two companies based on the strength of their institutional ownership, valuation, earnings, risk, dividends, profitability and analyst recommendations.

Dividends

TE Connectivity pays an annual dividend of $1.76 per share and has a dividend yield of 1.9%. EACO does not pay a dividend. TE Connectivity pays out 36.4% of its earnings in the form of a dividend. TE Connectivity has increased its dividend for 7 consecutive years.

Insider & Institutional Ownership

89.9% of TE Connectivity shares are owned by institutional investors. 0.7% of TE Connectivity shares are owned by company insiders. Comparatively, 97.9% of EACO shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Analyst Recommendations

This is a summary of current ratings for TE Connectivity and EACO, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
TE Connectivity 0 2 9 0 2.82
EACO 0 0 0 0 N/A

TE Connectivity currently has a consensus target price of $114.30, suggesting a potential upside of 20.15%. Given TE Connectivity’s higher possible upside, equities analysts clearly believe TE Connectivity is more favorable than EACO.

Profitability

This table compares TE Connectivity and EACO’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
TE Connectivity 9.39% 19.89% 9.95%
EACO 3.04% 14.54% 7.65%

Volatility & Risk

TE Connectivity has a beta of 1.08, meaning that its share price is 8% more volatile than the S&P 500. Comparatively, EACO has a beta of -1.33, meaning that its share price is 233% less volatile than the S&P 500.

Valuation & Earnings

This table compares TE Connectivity and EACO’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
TE Connectivity $13.11 billion 2.54 $1.68 billion $4.83 19.70
EACO $156.95 million 0.36 $4.05 million N/A N/A

TE Connectivity has higher revenue and earnings than EACO.

Summary

TE Connectivity beats EACO on 13 of the 15 factors compared between the two stocks.

TE Connectivity Company Profile

TE Connectivity Ltd., together with its subsidiaries, engages in the design, manufacture, and sale of connectivity and sensors solutions in the Americas, Europe, the Middle East, Africa, and the Asia?Pacific. The company operates through three segments: Transportation Solutions, Industrial Solutions, and Communications Solutions. The Transportation Solutions segment primarily provides terminals and connector systems and components, sensors, and relays, as well as application tooling, wires, and heat shrink tubing for use in the automotive, commercial transportation, and sensor markets. The Industrial Solutions segment offers terminals and connector systems and components; heat shrink tubing; relays; and wires and cables for industrial equipment, aerospace, defense, oil and gas, and energy markets. The Communications Solutions segment supplies electronic components, such as terminals and connector systems and components, undersea telecommunication systems, antennas, relays, and heat shrink tubing for the data and devices, subsea communications, and appliances markets. TE Connectivity Ltd. offers its products to approximately 150 countries primarily through direct selling to manufacturers, as well as through third-party distributors. The company was formerly known as Tyco Electronics Ltd. and changed its name to TE Connectivity Ltd. in March 2011. TE Connectivity Ltd. was incorporated in 2000 and is based in Schaffhausen, Switzerland.

EACO Company Profile

EACO Corporation, through its wholly-owned subsidiary, Bisco Industries, Inc., distributes and sells electronic components and fasteners primarily in the United States and Canada. It offers electronic components, including spacers and standoffs, card guides and ejectors, component holders and fuses, circuit board connectors, and cable components, as well as various fasteners and hardware products. The company supplies parts used in the manufacture of products in a range of industries, including aerospace, circuit board, communication, computer, fabrication, instrumentation, industrial equipment, and marine. It also provides customized services and solutions for various production needs comprising special packaging, bin stocking, kitting and assembly, bar coding, electronic requisitioning, integrated supply programs, and others. The company sells its products primarily to the original equipment manufacturers through its sales representatives in its 48 sales offices and 7 distribution centers; and through its Website. EACO Corporation was founded in 1973 and is headquartered in Anaheim, California.

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